Target opens 24 stores in Ontario, grocery market tougher

Target’s first stores in Canada had their official launch on April 5. The 24 stores in Ontario soft-launched over three weeks, enabling the U.S. retailer to test systems and processes, including its supply chain, according to IGD Retail Analysis. But Target’s initial assessment is that the Canadian grocers are a lot tougher competitively than the U.S.

The official launch of these stores is marked by its first promotional flyer. Target’s private label general merchandise ranges feature heavily as it seeks to create points of differentiation with its competitors. National brands feature within food and consumable categories, although these are placed towards the rear of the flyer, compared to a more up-front positioning in U.S. flyers. Food and grocery ranges are less comprehensive than in the US, particularly in terms of fresh foods.

The initial openings saw high demand from Canadian shoppers, leading to availability issues at a number of the stores, with high demand for fresh milk in particular. This highlights how the stores may be used more for convenience and top-up shopping missions, IGD said. Over the last two to three weeks the retailer has been reviewing its sales forecasts and replenishment processes.

Stores in Vancouver and Calgary are scheduled to open later this spring. Target is expected to open 124 stores in 2013, then 5-10 stores a year and grow to about 150 locations by 2017.

Meanwhile, major grocery chain Loblaws, which was tipped by analysts earlier this year to make a bid to buy Safeway Canada, announced it will invest $100 million on new Quebec store concepts under its Provigo and Loblaws banners in Quebec and on refurbishments.

The new concepts will focus on two ideas – the taste of Quebecers for cooking and getting together at the dinner table, combined with locally sourced, superior-quality fare. Provigo said it had surveyed the best practices found worldwide and will provide a richer shopping experience, with more than 100 new permanent jobs in different regions of the province expected to be created.